The Red Devils initially made a derisory bid of é3.5million for Smith, and after that was turned down, the Old Trafford board returned with an improved bid of é5.5million.

That has also been thrown out as Leeds value the forward at closer to the é10million mark, and it is understood Liverpool are now prepared to step in.

A Leeds spokesman confirmed: "The offers by Manchester United substantially undervalue Alan Smith's position as a top Premiership player.

"He is worth far more than what Manchester United are prepared to pay for him. Both offers were rejected immediately."

With Emile Heskey joining Birmingham today for é6.25million, manager Gerard Houllier has the funds at his disposal to snatch Smith from under the noses of their great rivals.

Determined

Leeds are clearly determined to get the best possible price for Smith, and are proving they will not be held to ransom, despite their relegation to the Football League.

It is believed Smith and his representatives have held preliminary negotiations with Liverpool, who are in a hard-bargaining position after recently guaranteeing themselves Champions League football for next season.

Smith to Liverpool would at least sit better with the Leeds supporters than Smith to Manchester United, although it remains to be seen if the latter come in with a second improved offer.

The Leeds striker's relationship with Leeds' fans has cooled considerably since he was mobbed by supporters at the end of the final home game against Charlton just over a week ago.

A lifelong Leeds fan, Smith was booed by his own supporters at Chelsea on Saturday as they began to realise their hero was willing to set aside the bitter rivalry between the two clubs in an effort to further his career.

Such is the disbelief at Smith's intentions that some Leeds fans are even claiming he is merely stringing United along in an effort to increase his value to his present employers.

Deluded

It appears to be a deluded theory, even though Juventus, Valencia, Inter Milan, Newcastle and Middlesbrough have also been mentioned as suitors.

But while Leeds can bring in as many bidders as they like, ultimately, any move will be down to Smith, who knows his club are still under pressure to sell despite spurning Manchester United's overtures.

If Leeds fans will be aghast at the possibility of a transfer, Red Devils supporters will hardly be sitting comfortably either.

Aside from Smith's poor goal ratio, the move would also raise more question marks about the long-term future of Ruud van Nistelrooy.

Despite repeated denials, rumours persist the prolific Dutchman will be heading to Real Madrid and the arrival of another international striker at Old Trafford would only fuel more speculation.